@Aim_High wrote:
@sarge12 wrote:
@Anonymous wrote:And just a PSA that credit limits aren't the same as cash in the bank! Chasing more and higher CLs isn't a necessary goal. Look at other threads here to see how quickly things can go away....
Those credit limits are not usually real credit limits anyway. If you have a seldom used card with a 25k limit, start charging 1000 dollars a day to that card and see if you ever get near that 25k limit before charges are denied. Their alogorithms are looking at past credit behaviors on that card, and extremely unusual behavior will get it flagged and they will be calling you, maybe even after an initial decline of the charges. If however running such charges is within your normal behavior, it might not even be questioned. They are very watchful for breakout charging though. People who have, like myself nearly 250,000 dollars in aggregate credit limits might think they could have the Mother of all buying sprees and max all those cards out, but in reality, they would not get very far into those limits before those cards would receive the Mother of all AA on credit cards.
This is true, but also especially moreso with some lenders and some types of cards. I have limits of $479K but I would never use more than a small fraction of that at any one time. It's nice to be trusted with that much and having high limits on multiple accounts not only helps with utilization (and buffering my credit score) but also give me flexibility to charge or balance transfer highly on a single account if I choose to do so. Options are always a good thing.
So yeah, if I charged up to limits on ALL or MOST of my cards, I would probably get shut down like @sarge12 described. But could I charge $24,900 on a single $25,000 credit line? For most of my lenders, absolutely! Would the bank call to verify it wasn't fraud? Very likely, and honestly I'm glad that they would. Would such high utilization temporarily hurt my credit score? Absolutely! Lol
Would high utilization on a single account trigger mass adverse action across my other cards? Eh, probably not, as long as I had been managing all my other accounts well, my scores were still high, and it didn't appear to be part of a longer term downward slide indicating distress.
There are some cards that will just disapprove higher charges. AMEX, I'm looking at you. In particular, their charge cards are based on those algorithms more than regular credit cards. If you don't use your Platinum card and then try to charge $24,900, it will likely be denied. And you may later learn that your current spending limit has dropped to perhaps, $7,000 even though in the past you put massive spend on it. So high spending on those cards requires you to consistently put high spend on those cards.
How in line the credit limit is with what the lender would allow depends largely on past behavior of that card holder. Running up very high balances might be normal behavior for some, but if you have a 25k limit and the most you have ever charged is 1200 and only then for a major appliance. If all of a sudden you put 1200 for 3 straight days on the card it would trip a flag in their system. Nearly every card issuer has a system that looks at the card holders history and flags an account if behavior is seen that is not normal for that card holder. Sudden changes might indicate fraudulant use of stolen card numbers, mental deficiency of the card holder, being fooled by scammers, etc. If however you are a businessman and travel a lot it might be normal. I have always found it wise to call the issuers of cards I will be using during a trip to make them aware some abnormal behavior will be seen due to my trip. They note it on my card in their computer and prevents the account from being flagged. It actually was suggested that the card holder should do so in the cards fine print, and some cards automated system even give an entry number to notify them of travel plans. In my case, more than once the card issuers seeing behavior that is not normal for me has caught fraudulant charges before they were even approved. The issuer then called me to ask if it was a valid charge. In fact, only once have I ever caught it before the issuer did. The issuers have actually gotten pretty good at catching abnormal behavior, but I guess the fact that the card holder is not held liable for fraudulant use means they have to be.
"Played the credit game" is a good way to word it. It is a game, or at least, it can be treated as such. If you just use credit responsibly without trying to work the system, you will have gradually increasing CLs. If you are a MyFICOer looking for what levers you can pull or what buttons you can push, you can accelerate some (not all) aspects greatly.
Example: My brother and his wife have had excellent credit since they got married in about 1994, through various cars, houses, etc. He has a very good income. They run nearly 100% of their monthly spend through one particular card (the one I am an AU on). They spend very little time studying the details. They just pay their bills on time and have for many years.
This resulted in my brother having a $15,000 CL on his main card. I suggested last year that he ask them for a CLI. He did, and they raised his limit to $25,000. That is his highest limit. He does have some other cards, but rarely uses them.
Meanwhile: I went from total CLs of $0 last March, to what you see in my signature today, by pushing, taking chances, being ok with denials, risking AAs. Because I had nothing to lose. I treated it like a game. That works for a while, but doesn't make sense to do forever, because at some point, you do have something to lose and you don't want to keep pushing it. Also at some point, you have all you need or more, so what's the point.
I have a modest income, and an aggregate credit limit of a bit over $110K on my credit cards. I am an expat working for an NGO, and I sometimes put reimbursable expenses on my cards. I like having a high credit limit to keep the utilization moderate. The most I have ever had on my cards at once is around $18,000, and most of it was reimbursable.
